Michael I. Knopf, et al., Plaintiffs-Appellants,
Michael Hayden Sanford, et al., Defendants-Respondents.
Law PLLC, New York (Eric W. Berry of counsel), for Michael I.
Knopf and Delphi Capital Management, LLC, appellants.
Greenberg, New York, for Norma Knopf, appellant.
Michael Hayden Sanford, respondent pro se.
J.P., Sweeny, Richter, Kapnick, Webber, JJ.
Supreme Court, New York County (Richard F. Braun, J.),
entered on or about November 3, 2016, which (1) granted
defendants' motion to vacate plaintiffs' note of
issue and recognized defendants' right to a jury trial on
damages, and (2) denied plaintiffs' motion to confirm the
report of JHO Gammerman, unanimously reversed, on the law and
the facts, without costs, the motion to vacate denied, the
note of issue reinstated, the request for a jury trial
denied, and the matter remanded for further proceedings.
commenced this action to recover amounts allegedly owed by
defendants pursuant to various loan agreements. This Court
previously determined plaintiffs' entitlement to partial
summary judgment on their breach of contract claims
(see 123 A.D.3d 521');">123 A.D.3d 521 [1st Dept 2014]), but the
decision did not provide for entry of judgment. Accordingly,
Supreme Court, on July 23, 2015, issued an order of reference
to the inquest part to calculate damages. No defendant
objected to or appealed from the order. Per court directive
and the parties' stipulation, plaintiffs filed a note of
issue on December 9, 2015 to have the case calendared in the
inquest part, and, by email and regular mail, served the note
of issue and certificate of readiness on defendants'
counsel Holwell Schuster & Goldberg LLP and also on
defendant Sanford, who, at times, had appeared pro se.
Plaintiffs offer affidavits swearing that the addresses used
for service were correct and acknowledging that the
affirmation of service includes multiple typographical errors
as to the addresses used.
response to email service of the note of issue, Holwell
Schuster, which had filed in this Court a notice of
appearance as counsel to all defendants, replied it was
"not counsel in the [Supreme Court] case" and
plaintiffs' counsel should accordingly "not proceed
on the assumption that serving our firm constitutes
Pursuit and Sanford filed jury demands on January 14, 2016,
the day the inquest on damages was scheduled to begin before
JHO Gammerman. At their initial appearance before JHO
Gammerman on January 14, 2016, defendants raised, for the
first time, the issue of proceeding by jury trial rather than
inquest. JHO Gammerman stated such issues could be decided
only by the referring court, and adjourned the inquest for
several days. Despite JHO Gammerman's explanation and
despite appearing before the court later that day, defendants
did not raise the jury trial issue and instead only sought an
adjournment of the inquest, which request was denied. The
inquest resumed on January 19 and defendants' counsel
again raised the jury trial issue, and JHO Gammerman again
stated his recommendation had been to raise the issue before
the court, as only the court could decide the issue, and
stated that he had granted the adjournment for that purpose.
On learning that counsel had nevertheless failed to raise the
jury trial issue with the court during the adjournment, JHO
Gammerman proceeded to start the inquest in earnest. Multiple
days of hearings followed, at the end of which JHO Gammerman
concluded the amount due plaintiffs from Sanford individually
totaled $10, 937, 850, and of that amount, defendants Sanford
and Pursuit were jointly liable to plaintiffs for $8, 336,
488. Ten days later, defendants' co-counsel demanded that
plaintiffs' counsel withdraw the note of issue on grounds
of improper service, an issue never before raised.
Court erred in granting the motion to vacate on grounds of
improper service. The record establishes that service by
email was effected on Holwell, Schuster, counsel to all
defendants. Supreme Court appropriately rejected
defendants' argument that Holwell, Schuster's
representation was limited to appellate matters, as the
notice of appearance does not so indicate and they furnish no
proof of either having given informed consent to a limited
representation or proof that notice of such limited
representation was provided to the court or opposing counsel
(see Rules of Professional Conduct [22 NYCRR 1200.0]
rule 1.2[c]). Service by email was valid, as the notice of
appearance expressly requested such service (see Alfred
E. Mann Living Trust v ETIRC Aviation S.A.R.L., 78
A.D.3d 137, 141-142 [1st Dept 2010]), and the record
establishes a pattern of email service between opposing
counsel. As Holwell, Schuster was counsel to defendant
Sanford at the time, this resolves the inquiry as to the
propriety of service on him as well.
Court also erred in recognizing defendants' right to a
jury trial on damages. As the note of issue was properly
served by email on December 9, 2015, their jury demands were
due by December 24 (see CPLR 4102(a)), and they made
no application to extend their time under CPLR 4102(e). Their
objections to JHO Gammerman do not affect this result, as
they knew the objections could only be raised to the
referring court but they did not raise them, even when
granted an adjournment of the inquest for that purpose.
Supreme Court's denial of the motion to confirm was based
solely on its decision to vacate the note of issue, the order
denying the motion is reversed and the motion remanded to the
court to confirm, reject, or ...